In conjunction with the beginnings of diamond production, the urban-type settlement of Udachny was founded in 1968;[citation needed] town status was granted to it in 1987.

[1] As part of a plan to create the basin for a tailings dam for the nearby diamond mine, a 1.7 kiloton atomic bomb was detonated 98 meters (322 ft) underground near Udachny on October 2, 1974.

Original plans had called for eight similar explosions to be conducted; however, due to radioactive fallout being far greater than expected, the project was halted after the first blast.

The shaft in which the explosion was held was not plugged until eighteen years later, with an estimated 7-to-20-meter (23 to 66 ft) thick concrete sarcophagus.

[1] Within the framework of administrative divisions, it is, together with one rural locality (the selo of Polyarny), incorporated within Mirninsky District as the Town of Udachny.